1、 September 20, 2010 Hong Kong: Real Estate More clarity on policy, more launches, potentially more upside Look out for a new round of launches Developers do not appear to be discouraged by market concerns on government policy. A number of them are prepared to embark on another round of launches in 4
2、Q. As we approach the Policy Address (Oct 13) and the public consultation on subsidized home ownership closed last week, we are seeing more clarity on government policy direction - these developments so far have not derailed the physical market uptrend. Policies are mostly preemptive and addressing
3、longer term supply-demand balance The demand-side measures are mostly preemptive. The policy of increasing land supply is an acceptable approach, in our view, to assure a balanced supply/demand in the longer run but it is clear that the near-term supply would not be impacted. The swing factor is how
4、 the government would address the call for subsidizing home ownership, but a series of media articles recently reported that the government would not resume HOS but may assign some non-government bodies like the Housing Society to assist on this. It appears to us that the scale of the for-sale subsi
5、dized housing program in government thinking will be much smaller than that of the old HOS scheme. Current share prices have priced in some 7%-45% price drop We are still looking for a further 15% residential price rise before the end of 2011, but our NAV sensitivity analysis shows the current share
6、 prices have factored in some 7%-45% drop in property prices (all segments) for major developer stocks (to equalize NAV to the prevailing share price). Catalysts In addition to a series of land auctions (Sep 29 and Oct 12) before the Policy Address, a number of residential projects are on the launch
7、ing pad, incl. Cheung Kongs Oceanaire, Nan Fungs Queens Cube , and SHKPs Valais. We are looking for another round of strong property sales to boost developers performances. We raised our residential price growth forecast for 2011 from 10% to 15% and thus raised our NAV-based 12-month TP for the deve
8、lopers by up to 3% and their FY2011E-2013E EPS estimates by 1%-8%. Key risks An abrupt economic downturn and unexpected interest rate hike. VALUATION SUMMARY EPS, NAV AND TARGET PRICE CHANGES PROPERTY PRICE ASSUMPTIONS Note: (1) For important disclosures, please go to http:/ (2) For methodologies an
9、d risks associated with 12-month target prices mentioned, please refer to the analysts previously published research. Anthony Wu +852-2978-0634 Goldman Sachs (Asia) L.L.C. The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, invest
10、ors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification, see the end of the text. Other important disclosures follow
11、 the Reg AC certification, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S. Justin Kwok +852-2978-0481 Goldman Sachs (Asia) L.L.C. Sean Chan +852-2978-0037 Goldman Sachs (Asia) L.L.C. The Goldman Sachs Group, Inc. Global Inve
12、stment ResearchStock Ticker Rating Sep-16 12-mo Potential Forward NAVPrice (HK$)TP (HK$)upside/downsideNAV/shr(HK$)Prem/ (disc) %Property developersKerry Prop. 0683.HK Buy*40.95 48.05 17% 64.04 (36)%SHKP 0016.HK Buy 117.40 140.00 19% 155.50 (25)%Sino Land 0083.HK Buy 14.42 17.70 23% 19.65 (27)%Hang
13、Lung Prop. 0101.HK Buy 37.55 34.90 (7)%38.74 (3)%Hang Lung Group 0010.HK Neutral 49.20 44.20 (10)%58.7 (16)%New World Dev. 0017.HK Neutral 13.42 16.95 26% 24.18 (44)%Henderson Land 0012.HK Neutral 49.80 57.35 15% 76.44 (35)%Property investorsHysan 0014.HK Neutral 27.45 24.60 (10)%35.13 (22)%Link REI
14、T 0823.HK Neutral 23.00 20.20 (12)%31.30 (27)%HKLand (US$) HKLD.SI Neutral 5.97 5.28 (11)%6.60 (10)%Great Eagle 0041.HK Sell 22.70 20.50 (10)%34.13 (33)%Champion REIT 2778.HK Sell 3.94 2.65 (33)%3.93 0%* On our Asia Pacific Conviction ListSource: Datastream, Goldman Sachs Research estimates.Underlyi
15、ng EPS estimates (HK$)FY11E FY12E FY13EOld New Chg Old New Chg Old New ChgProperty developersHang Lung Prop. 1.58 1.58 0% 1.74 1.81 4% 1.45 1.49 2%Kerry Prop. 2.42 2.42 0% 2.70 2.86 6% n.a. n.a. n.a.SHKP 6.49 6.49 0% 7.44 7.62 2% 8.30 8.64 4%Sino Land 0.82 0.82 0% 0.90 0.94 4% 0.99 1.06 8%Hang Lung
16、Group 2.74 2.76 1% 3.00 3.16 5% 2.26 2.31 2%New World Dev. 0.92 0.92 0% 1.23 1.28 4% 1.06 1.14 7%Henderson Land 2.73 2.82 3% 2.82 2.90 3% n.a. n.a. n.a.Fwd NAV (HK$) Target Price (HK$)Old New Chg Old New ChgProperty developersHang Lung Prop. 38.72 38.74 0.1% 34.80 34.90 0.3%Kerry Prop. 63.15 64.04 1
17、.4% 47.35 48.05 1.5%SHKP 150.29 155.50 3.5% 135.50 140.00 3.3%Sino Land 19.19 19.65 2.4% 17.30 17.70 2.3%Hang Lung Group 58.70 58.87 0.3% 44.00 44.20 0.5%New World Dev. 23.74 24.18 1.9% 16.60 16.95 2.1%Henderson Land 75.72 76.44 1.0% 56.80 57.35 1.0%Source: Goldman Sachs Research estimates.2010E 201
18、1E Resi Office RetailRes - primary +20% +20% Cap rate 3.0% 5.5% 6.0%Res - secondary +15% +15%2010E 2011E 2010E 2011EOffice (Central) +25% +10% Retail +5% to 8% +5%Office (non-Central) +10% +10%Source: Goldman Sachs Research estimates.渐飞研究报告 - http:/September 20, 2010 Hong Kong: Real Estate Goldman S
19、achs Global Investment Research 2 More launch activities in the pipeline With the government policy direction gradually taking shape and the announced policies so far are primarily preemptive and addressing longer-term housing supply/demand balance rather than suppressing housing demand, we are look
20、ing for a positive response to the upcoming launches and land sales to restore investors confidence on the developer sector. Developers do not appear to be weighed down by the newly released policies and those speculated to be taking effect by the government so far. A number of new residential proje
21、cts are already on the launching pad. They include Cheung Kongs Oceanaire in Ma On Shan (1,143 units), Nan Fungs Queens Cube in Wanchai (96 units), and SHKPs Valais in Sheung Shui (300 units). Exhibit 1: Key upcoming potential launches in 4Q2010 Source: Goldman Sachs Research estimates. Exhibit 2: R
22、ecent decline in home sales appears to be only seasonal Weekly transactions for major 35 secondary estates Source: Midland Agency, Goldman Sachs Research estimates. Potential new launches Location No. of units Developers Ready for launch?Festival City Ph. 2 Tai Wai 1,376 Cheung Kong No, pending for
23、pre-sale consentOceanaire, 18 Po Tai Street Ma On Shan 1,143 Cheung Kong Yes, pre-sale consent recdValais, Kwu Tung Sheung Shui 300 SHKP No, pending for certificate of complianceLe Billionaire Ph. 2, Kowloon City Wong Tai Sin 276 ChinaChem No, pending for certificate of complianceQueens Cube, 235-24
24、5 Queens Road East Wan Chai 96 Nan Fung/URA Yes, no pre-sale consent needed9-12 Chun Fai Terrace Tai Hang 66 NWD Yes, no pre-sale consent needed9 Shouson Hill Road Island South 31 SHKP Yes, no pre-sale consent needed6 Siu Fai Terrace Wan Chai 24 K Wah Yes, certificate of compliance recdSub-total 3,3
25、120100200300400500600Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10(units)Weekly transactions for 35 major secondary estates2007 2008 2009 2010渐飞研究报告 - http:/September 20, 2010 Hong Kong: Real Estate Goldman Sachs Global Investment Research 3 Raising target price
26、s by up to 3% factoring in better residential price growth assumptions Private residential prices have risen by 15% year-to-date according to Centaline Property Agency. We have raised our residential price growth forecasts for 2011 from 10% to 15%. This has led to an up to 3% increase to our FY2011
27、NAV estimates and NAV-based target prices for major developer stocks. Exhibit 3: Valuation Summary for the Hong Kong developers Note: (1) For important disclosures, please go to http:/ (2) For methodologies and risks associated with 12-month target prices mentioned, please refer to the analysts prev
28、iously published research. Source: Goldman Sachs Research estimates. Based on last Friday close, the developer sector was at a 24% discount to our fwd-NAV estimates. While, in our view, it does not appear that the market has factored in the physical property price performance year-to-date, our NAV s
29、ensitivity analysis does show that the current share prices have factored in a 7%-45% property price (all segments) drop for major developer stocks to make their NAV equal to the prevailing share price. Rating Price 12-mo TP Potential Curr NAV Prem/ Fwd NAV Prem/ Underlying P/E (X) Div Yield (%)(HK$
30、) (HK$) Upside/downside(HK$) (Disc)% (HK$) (Disc)% FY10E FY11E FY12E FY13E FY10E FY11E FY12E FY13EHK property developersKerry Prop.Buy* 40.95 48.05 17 56.88 (28) 64.04 (36) 19 17 14 n.a. 2.0 2.0 2.1 n.a.SHKP Buy 117.40 140.00 19 142.09 (17) 155.50 (25) 21 18 15 14 2.5 2.8 3.3 3.7Sino Land Buy 14.42
31、17.70 23 18.03 (20) 19.65 (27) 20 18 15 14 2.8 3.1 3.3 3.5Hang Lung Prop.Buy 37.55 34.90 (7) 34.37 9 38.74 (3) 23 24 21 25 1.9 2.0 2.1 2.1Hang Lung Group Neutral 49.20 44.20 (10) 58.82 (16) 58.87 (16) 18 18 16 21 1.5 1.6 1.7 1.7Henderson Land Neutral 49.80 57.35 15 72.42 (31) 76.44 (35) 21 18 17 n.a
32、. 2.6 2.6 2.6 n.a.New World Dev. Neutral 13.42 16.95 26 21.55 (38) 24.18 (44) 81510123.03.03.03.0Sector weighted average 11 (18) (24) 19 19 16 18 2.4 2.5 2.8 2.6* on our Asia-Pacific Conviction List.Prices as of Sep 16, 2010.渐飞研究报告 - http:/September 20,2010Hong Kong:RealEstateGoldmanSachs GlobalInve
33、stmentResearch4Exhibit 4: Sensitivity of our NAV estimate to residential prices Source: Goldman Sachs Research estimates. * on Conviction List Company RatingShare priceFwd-NAV NAV sensitivity to change in property price from current levelBy how much property price has to change for NAV to reach curr
34、ent share priceBy how much property price has to change for “20% discounted“ NAV to reach current share price(HK$) (HK$) -30% -20% -10% 0% +10% +20%DevelopersHang Lung Prop Buy 37.55 38.74 23.37 26.71 30.04 33.38 36.71 40.05 12% 40%Difference from base case -40% -31% -22% -14% -5% 3%SHKP Buy 117.40
35、155.50 93.29 107.14 121.00 134.73 148.54 162.35 -13% 9%-40% -31% -22% -13% -4% 4% .Kerry Prop Buy* 40.95 64.04 39.5 45.11 50.73 56.18 61.61 66.97 -28% -10%-38% -30% -21% -12% -4% 5%Sino Land Buy 14.42 19.65 9.56 11.70 13.85 15.95 18.07 20.18 -7% 10%-51% -40% -30% -19% -8% 3%New World Dev Neutral 13.
36、42 24.18 15.51 17.39 19.28 21.13 23.01 24.89 -40% -23%-36% -28% -20% -13% -5% 3%Henderson Land Neutral 49.80 76.44 56.51 60.92 65.34 69.76 74.18 78.58 -45% -17%-26% -20% -15% -9% -3% 3%Company RatingShare priceFwd-NAV NAV sensitivity to change in residential price from current levelBy how much resid
37、ental price has to change for NAV to reach current share priceBy how much residential price has to change for “20% discounted“ NAV to reach current share price(HK$) (HK$) -30% -20% -10% 0% +10% +20%DevelopersHang Lung Prop Buy 37.55 38.74 36.35 36.87 37.38 37.89 38.41 38.92 -7% 175%Difference from b
38、ase case -6% -5% -4% -2% -1% 0%SHKP Buy 117.40 155.50 127.05 131.80 136.56 141.18 145.89 150.60 -49% 12%-18% -15% -12% -9% -6% -3%Kerry Prop Buy* 40.95 64.04 48.96 52.13 55.22 58.31 61.40 64.41 -55% -23%-24% -19% -14% -9% -4% 1%Sino Land Buy 14.42 19.65 12.92 14.15 15.38 16.58 17.78 18.98 -24% 6%-34
39、% -28% -22% -16% -10% -3%New World Dev Neutral 13.42 24.18 19.56 20.40 21.24 22.05 22.88 23.72 -85% -56%-19% -16% -12% -9% -5% -2%Henderson Land Neutral 49.80 76.44 66.00 67.98 69.96 71.93 73.91 75.88 not applicable -50%-14% -11% -8% -6% -3% -1%ALL SEGMENTSRESIDENTIAL ONLY渐飞研究报告 - http:/September 20
40、, 2010 Hong Kong: Real Estate Goldman Sachs Global Investment Research 5 More clarity on policy A series of media reports citied different sources regarding details of future government efforts in: (1) increasing land supply; (2) subsidizing home ownership; (3) increasing the liquidity of second han
41、d HOS flats; (4) restricting speculation/investment activities in the property market; (5) tightening bank credit for property buyers, the policy direction of the HKSAR Government gradually taking shape. Most demand-side measures are preemptive On the demand side, most of the government measures ann
42、ounced so far: (1) lifting the down payment requirement for high-end properties, (2) requiring mortgage banks to stress test their prospective mortgages based on a higher interest rate scenario, and (3) limiting the debt service ratio is just preemptive, in our view, as we believe most banks are alr
43、eady implementing similar standards across their mortgage lending operations. What else could be done or is being brought up the demand side? There have been talks on taking the “property investment” of the qualifying assets of the Capital Investment Entrant Scheme of the Immigration Department or r
44、estricting foreigners from buying properties. We think the latter is extremely unlikely as this will violate the principle of free capital flow in Hong Kong and Financial Security has already denied it. This move, if true, wouldnt have a material impact on the HK property market, in my view. Regardi
45、ng the option of excluding property assets from Capital Investment Entrant Immigration Scheme, we strongly believe that many affluent mainland buyers were buying HK property assets primarily for investment or wealth diversification purpose and whether they can get a HK citizenship is a minor conside
46、ration. Not to mention they can still opt for the route of HK$6.5mn investment in financial assets to gain HK citizenship. Increasing land supply is the right strategy, but its impact is very small in the near term and not necessarily material in the long run On the supply side, the Government has f
47、ocused their efforts on increasing future land supply. Beside putting up a number of sites for public auction during the year, the Lands Department is currently looking to rezone 29.5 hectares of industrial land into residential use, according to the Hong Kong Economic Times (Sep 15). The media proj
48、ected a total 19,000 residential units could be built on these sites after making reference to the prevailing plot ratios. While 19,000 units seem many compared to one year of private residential take-up which is running at about 15,000 units/year, it is important to note that the Lands Department i
49、s just in the process of “Area Assessment” and they have not come to the stage of actual rezoning and outlying the new zoning plan yet. Another important note to underline is that these lands were mostly situated by existing industrial buildings in either private or government hands. Having the sites rezoned does not mean there will be redeve
